The International Perspective for Policy and Governance (IPPG) has expressed concern over the recent passage of the Energy Sector Levies (Amendment) Bill, 2025, which introduces a new GHS 1 Energy Sector Shortfall and Debt Recovery Levy (ESSDRL) per litre of fuel under the Energy Sector Levies Act (ESLA).
As a non-partisan public policy think tank dedicated to sustainable development, fiscal accountability, and inclusive governance, IPPG has raised alarm over what it describes as yet another tax measure imposed without adequate public consultation or transparent justification.
Lack of Stakeholder Engagement Undermines Credibility
IPPG criticised the swift passage of the levy, citing limited input from the public, civil society, and industry players as a missed opportunity for participatory governance. It emphasized that broad consultation is a fundamental principle in sound policymaking and legislation.
The think tank noted that the new levy brings the total tax and levy components on fuel to over 26% of the ex-pump price. This, it argued, undermines public trust—even amidst recent declines in fuel prices due to the appreciation of the Ghana cedi against the U.S. dollar.
“Trust is built not only on outcomes but on the transparency and inclusiveness of policy processes—and in this case, that was lacking,” said Seth Owusu-Mante, IPPG Research Fellow.
A Threat to Ghana’s Energy Transition Goals
IPPG expressed particular concern over the inclusion of Liquefied Petroleum Gas (LPG) in the levy, warning that this could derail Ghana’s clean cooking agenda. The government’s Cylinder Recirculation Model (CRM) and national LPG penetration target of 50% by 2030 are likely to be undermined by the additional cost burden on consumers.
The think tank warned that the policy contradiction could:
Disincentivize LPG use among low-income households
Reverse gains in reducing dependence on biomass fuels like charcoal and firewood
Jeopardize Ghana’s commitments under the SDGs and its Nationally Determined Contributions (NDCs)
ESLA: A Decade On, Debt Still Looms
As of January 2025, petroleum products in Ghana are subject to 11 different taxes and regulatory margins, many under the ESLA framework. Despite the significant revenues generated over the years, IPPG notes that Ghana’s energy sector remains financially distressed.
“Nearly a decade after the enactment of ESLA, the energy sector is still burdened by deepening debt. Despite substantial revenue mobilization, persistent inefficiencies and weak governance continue to hinder sector recovery,” Mr. Owusu-Mante observed. “This raises serious questions about the effectiveness and accountability of ESLA as a debt management mechanism.”
Recommendations and Call to Action
While acknowledging that the levy is unlikely to be reversed, IPPG insists that its implementation must be guided by transparent reporting, rigorous oversight, and alignment with long-term energy policy goals.
The think tank called on the government to take the following steps:
Conduct a Regulatory Impact Assessment (RIA): Evaluate the socio-economic effects of the new levy, including its impact on inflation, oil marketing companies, LPG adoption, GPRTU operations, and consumer welfare. Use the findings to mitigate negative consequences.
Introduce a Sunset Clause: Set a clear expiry date for the levy, coupled with periodic reviews and public reports, to ensure accountability and prevent indefinite imposition.
Institutionalize Stakeholder Engagement: Ensure future policy and legislative decisions, especially in the energy sector, involve meaningful consultations with diverse groups to promote inclusive governance.
Tackle Energy Sector Inefficiencies: Focus on eliminating financial leakages and inefficiencies as a sustainable alternative to frequent levy impositions.